[indymike]

There are actually four buckets:

1. Research and Development. Special tax treatment and tax credits usually apply to R&D.

2. Sales/Marketing - Pre-sale sales engineers, sometimes implementations

3. Maintenance. Developers that fix bugs and perform non-R&D work on code that usually isn’t eligible for special tax treatment or credits.

4. In hosted services/PaaS/SaaS, operations usually carry some level of swe salaries.

Understanding the tax implications of which budget and what work is being done is really important, and gets much more complex as you grow.

[MichaelZuo]

There's also a fifth bucket for really large companies and really high end engineers:

5. CEO/COO/CTO's special budget for special consultants